r/tax•
djagohoodie

Claiming Bad Debt on IRS return

I loaned my father $50,000 about 12 years ago. It was understood that he would pay me back, but there was no formal written contract.

He recently became disabled and realistically won’t be able to repay the money. At this point I consider the debt uncollectible.

I’m wondering if this could qualify as a non-business bad debt deduction on my tax return.

Has anyone successfully claimed a bad-debt deduction for a family loan? What kind of documentation did the IRS expect?

Also, does the fact that the loan happened 12 years ago cause problems if it only became “worthless” now?

Posted Mar 8, 2026, 8:04 PM UTC

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